Bill Text: HI SB591 | 2011 | Regular Session | Amended

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Bill Title: Pharmacy Benefit Management Companies

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Engrossed - Dead) 2011-04-04 - (H) The committee(s) recommends that the measure be deferred. [SB591 Detail]

Download: Hawaii-2011-SB591-Amended.html

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THE SENATE	S.B. NO.	591
TWENTY-SIXTH LEGISLATURE, 2011		S.D. 2
STATE OF HAWAII		H.D. 2

A BILL FOR AN ACT

 

 

RELATING TO PHARMACY BENEFIT MANAGEMENT COMPANIES.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that pharmacy benefit management companies are intermediaries that negotiate services and costs between pharmaceutical companies and third payer parties, such as insurance companies, businesses, and cash-paying customers; and the pharmacy benefit management institute reported that the combined market share of prescriptions processed by MedCo, Express Scripts, and CVS/Caremark in the third quarter of 2010 was 47.17 per cent of all prescriptions in the United States.  Currently, there is no standardized or integrated reporting mechanism across service environments in the State.  As a result, pharmacy providers, such as chain drug stores and independent pharmacies, are currently subjected to unregulated auditing practices that attempt to recoup, gather negative data, and penalize.

     The legislature also finds that guidelines should be developed that encourage audits to be performed in a fair and balanced manner and legislation drafted to establish a more regimented and reliable audit procedure.

     The purpose of this Act is to establish a task force to make recommendations to regulate the licensing of pharmacy benefit management companies by ensuring financial reliability and mandating full disclosure of drug costs and financial contracts.

     SECTION 2.  (a) There shall be a task force attached to the department of commerce and consumer affairs for administrative purposes.  The purpose of the task force is to review the policies of the state-funded prescription drug coverage program and its services and customer complaints with the forced use of the mail order program.

     (b)  The task force shall:

     (1)  Suggest prohibited activities by pharmacy benefit management companies and define appropriate penalties for violations of prohibited activities;

     (2)  Delineate strategies and methodologies for the insurance commissioner to use as a guideline for a schedule of allowable acquisition costs and professional dispensing fees;

     (3)  Determine the feasibility of implementing a licensure fee for any pharmacy benefit management company applying for licensure in the State;

     (4)  Make recommendations on the disclosure to the purchaser and insurance commissioner regarding a complete report of all rebates, manufacturer payments, incentives, and prescription reimbursements to pharmacies on a quarterly basis;

     (5)  Review potential alternatives to the use of the mandated mail order formula and incorporate these alternatives into the protocols of the various options available allowing for "Patients Right to Choose Their Own Pharmacy", to address language barrier issues and to provide for timely access to prescription medication and pharmacy personnel;

     (6)  Develop specifications for a quality monitoring system that:

          (A)  Can be replicated across departments for consistency;

          (B)  Prohibits:

              (i)  Manipulation of co-payments or other tangible incentives;

             (ii)  Differential reimbursements to different pharmacy providers; and

            (iii)  Mandatory mail order programs for prescription drug coverage after three fills on maintenance medications;

          (C)  Audits pharmacies to assure formulary compliance, accurate dispensing, and patient safety and enhance the overall quality of care provided;

          (D)  Tracks serious injuries or problems from any provider, in any setting, whether the provider is a mail order service or local pharmacy; and

          (E)  Establishes guidelines for quality reviews and data analysis to identify trends.

     (c)  The task force shall consist of eleven members as follows:

     (1)  A member of the house of representatives appointed by the speaker of the house of representatives;

     (2)  A member of the senate appointed by the president of the senate;

     (3)  The director of health or the director's designee;

     (4)  The insurance commissioner or the insurance commissioner's designee;

     (5)  Two members selected by the director of health who are from different private service providers;

     (6)  Two members selected by the Hawaii employer-union health benefits trust fund board who are members of the trust fund; and

     (7)  Three members appointed by the governor from a list submitted by the speaker of the house of representatives and president of the senate, with each member representing a different organization that represents pharmacists and their consumers, one of which must be from the island of Kauai.

     The members of the task force shall serve without compensation and shall receive no reimbursement for expenses.

     (d)  No later than twenty days prior to the convening of the 2012 regular session, the task force shall submit a report to the legislature on its findings and recommendations, including any proposed legislation or funding appropriation necessary to implement the recommendations.

     SECTION 3.  The task force shall cease to exist on May 1, 2012.

     SECTION 4.  This Act shall take effect upon its approval.

 

Report Title:

Pharmacy Benefit Management Companies

 

Description:

Creates a task force to make recommendations to regulate the licensing of pharmacy benefit management companies by ensuring financial reliability and mandating full disclosure of drug costs and financial contracts.  (SB591 HD2)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.